BUSI­NESS

Irish Examiner - - Front Page - Ge­off Per­ci­val

Gross mort­gage lend­ing is ex­pected to grow by around 30% this year, but house price in­fla­tion is set to grow in tan­dem, fig­ures by the Bank­ing & Pay­ments Fed­er­a­tion of Ire­land show.

Gross mort­gage lend­ing is ex­pected to grow by around 30% this year, but house price in­fla­tion is set to grow in tan­dem.

New fig­ures pub­lished by the Bank­ing & Pay­ments Fed­er­a­tion of Ire­land show strong year-on-year growth for mort­gage ap­provals in July. Over­all ap­provals were up 17% on the same month last year, with 3,970 granted at a com­bined €853m.

That value was up 23.3% year-on-year. Ap­provals for first-time buy­ers rose 21.4%, to just over 2,000, year-onyear. There was a 14.5% rise in mover-pur­chaser mort­gages ap­proved, ac­count­ing for nearly a third of July’s ap­provals. Re-mort­gage/ switch­ing ap­provals rose by over 15%, on an an­nu­alised ba­sis, last month.

“Mort­gage ap­provals con­tin­ued to grow at a ro­bust pace in July, al­beit at a slower clip than in re­cent months. A key take­away [from the lat­est data] is that the num­ber of ap­provals for first-time buy­ers con­tin­ues to ex­ceed the ad­di­tion to the hous­ing stock, thus on­go­ing price in­fla­tion is in­evitable as this money chases a lim­ited amount of prop­er­ties,” ac­cord­ing to Good­body chief econ­o­mist Der­mot O’Leary.

“We are fore­cast­ing 30% growth in gross new lend­ing this year. Although there is a gap open­ing up be­tween ap­provals and draw­downs, due to lim­ited sup­ply, this looks achiev­able at this stage and will con­trib­ute to net lend­ing growth in the bank­ing sys­tem for the first time in eight years in 2017,” he added.

July, how­ever, saw mon­thon-month falls — with over­all ap­provals down by just over 8% on June’s lev­els; and first-time buyer ap­provals down nearly 12%.

Mean­while, UK fig­ures showed con­sumer credit growth hit a more than oneyear low in July; slow­ing from 10% to 9.8% — its weak­est in­crease since April 2016. The Bank of Eng­land said 68,689 mort­gages were ap­proved in Britain in July, com­pared to 65,318 in June.

Ear­lier this month, the bank said it ex­pected UK mort­gage ap­provals to av­er­age around 66,000 a month over com­ing quar­ters.

But the value of mort­gage lend­ing in­creased by only £3.6bn in July, slow­ing from £4.13bn in June. The econ­omy has had its slow­est start to the year since 2012, as con­sumers come un­der pres­sure from a rise in in­fla­tion.

Ad­di­tional re­port­ing Reuters

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